LAU TIN SHEK v. TSANG KOON SAU

DCCJ 2784/2013
DCCJ 1630/2019
(Heard Together)

[2022] HKDC 258

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 2784 OF 2013

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IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 1630 OF 2019

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JUDGMENT

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Introduction

1.  Mr Lau brought an action under DCCJ 2784/2013 (“the Ownership Action”) to claim beneficial interest in a residential flat on the ground floor of a small house registered in the name of Mr Tsang (“the Flat”). In September 2015, South-China Universal Finance Ltd (“South-China”) instituted proceedings in the High Court under HCA 2134/2015, which were subsequently transferred to the District Court and assigned the case number of DCCJ 1630/2019 (“the Legal Charge Action”), against Mr Tsang to enforce a legal charge to claim the outstanding balance of a loan and vacant possession of, among other things, the Flat.

2.  By the order of Master Lai dated 28 June 2016 in the Legal Charge Action, default judgment was against Mr Tsang in respect of a sum of HK$1 million together with interest thereon at the rate of 18% per annum from 12 June 2016 to the date of payment.

3.  By an order of Master H. Au-Yeung dated 19 May 2017, Mr Lau was allowed to intervene in the Legal Charge Action and be joined as the 2^nd defendant therein.

4.  By the order of Master D. Ho dated 5 June 2017, Mr Tsang’s Defence and Counterclaim in the Ownership Action were struck out. Mr Tsang has not taken part in these proceedings ever since.

5.  By the order of Master S.H.Lee dated 18 November 2019, the Ownership Action and the Legal Charge Action were ordered to be tried at the same time. This is the trial of the two actions. Only Mr Lau and South-China take part in the trial.

6.  On the other hand, South-China took out a summons dated 6 January 2021 pursuant to Order 14A, Rules of the District Court (“the O.14A Summons”) in the Legal Charge Action. At the pre-trial review hearing on 11 January 2021, this court adjourned the hearing of the O.14A Summons to the day before the trial. I shall dispose of the O.14A Summons in the later part of this judgment.

Background facts

7.  The undisputed background facts relating to both actions can be outlined as follows.

8.  Mr Tsang was and still is an indigenous villager of Sai Kung and pursuant to the Small House Policy, by the New Grant No.6183 (“the New Grant”), Mr Tsang was granted by the Government a piece of land known as Lot No.307 in Demarcation District 252 (“the Lot”), now known as 5C Tso Wo Road, Sai Kung, New Territories in or about October 1977 for the purpose of erection of a 3-storey house commonly known as “small house” thereon.

9.  By a letter dated 7 March 2000, the Lands Officer of Sai Kung imposed on Mr Tsang a deadline for the completion of construction of a small house on the Lot.

10.  On or about 9 June 2003, the District Lands Office issued to Mr Tsang a Certificate of Compliance to certify that Mr Tsang had complied with all the General and Special Conditions of the New Grant after an inspection of the small house erected on the Lot (“the Small House”). The Flat is situated on the ground floor of the Small House.

11.  By the letter dated 11 July 2016 (“the CLP Letter”), CLP Power Hong Kong Limited confirmed that Ms Shirley Lee had become the registered owner of its account in respect of the Flat since March 1999. Ms Shirley Lee is the wife of Mr Lau.

12.  The minutes of a resident meeting held on 24 September 2000 (“the Meeting”) show that Mr Lau attended the said meeting as the representative of the Flat.

13.  On 11 June 2011, Mr Lau and Mr Tsang entered into a written tenancy agreement (“the Tenancy Agreement”) in respect of the Flat. Mr Tsang never demanded and Mr Lau never paid any rent under the Tenancy Agreement.

14.  Mr Tsang made a claim in the Lands Tribunal under LDPD 565 of 2013 (“the Lands Tribunal Claim”) against Mr Lau for the rent arrears under the Tenancy Agreement and recovery of possession of the Flat. By a decision dated 9 August 2013 (“the Decision”), Deputy Judge Madam Tracy Chan dismissed the claim of Mr Tsang having concluded that the Tenancy Agreement did not evidence a genuine lease.  

15.  South-China is a registered and licensed money-lender under the Money Lenders Ordinance, Cap. 163.

16.  South-China as lender and Mr Tsang as borrower entered into a written loan agreement dated 12 May 2015 (“the Loan Agreement”). Pursuant to the Loan Agreement, South-China advanced a loan of HK$1 million to Mr Tsang (“the Loan”). Mr Tsang had to repay to South-China the Loan together with interest thereon at the rate of 18% per annum by 12 monthly installments.

17.  The Loan, together with any other indebtedness, was subsequently secured by a legal charge dated 30 June 2015 (“the Legal Charge”). By the Legal Charge, the ground floor of the Small House is charged in favour of South-China.

18.  Mr Tsang has defaulted on the loan repayment since 11 July 2015. Despite repeated demands, Mr Tsang did not make any repayment. Hence, South-China brought the Legal Charge Action shortly afterwards.

Mr Lau’s pleaded case

19.  In gist, the primary case of Mr Lau is that he is the beneficial owner of the Flat having paid a sum of HK$600,000 to a developer on behalf of Mr Tsang and his brother and made subsequent financial contribution to the improvement of the Flat in reliance of a promise of Mr Tsang. Alternatively, he claims that he has adversely possessed the Flat since 1998 and hence has acquired a possessory title to the Flat.

20.  Mr Lau claims to be a close friend of Mr Tsang before Mr Tsang emigrated to England in 1975.

21.  Mr Tsang’s brother was the beneficial owner of another lot of land next to the Lot known as Lot No.308 in Demarcation District 252. The Tsang’s brothers at an unknown time sold their respective Ding rights in respect of the two lots to a developer for HK$240,000.

22.  Mr Lau alleges that in mid-1997 at a restaurant in Sai Kung, Mr Tsang asked him to procure the developer to assign the Ding rights back to him and his brother.

23.  Mr Lau happened to know one Mr Cheung who was the representative of the developer. He then approached Mr Cheung and related the request of the Tsang brothers to Mr Cheung.

24.  The developer eventually agreed to assign the Ding rights back to the Tsang brothers on condition that besides the amount of HK$240,000, they had to pay an additional sum of HK$600,000 for the two lots.

25.  The Tsang brothers agreed to return to the developer HK$240,000 but they did not want to pay the extra amount. They asked Mr Lau to settle the extra amount of HK$600,000 for them. Mr Lau and Mr Tsang reached an agreement that Mr Tsang would assign the Flat to Mr Lau after completion of the construction of the Flat if Mr Lau paid the extra amount to the developer (“the Agreement”). Pursuant to the Agreement, Mr Lau paid the developer the sum of HK$600,000 on behalf of the Tsang brothers.

26.  After the Small House was constructed, in or about 1998, Mr Lau took possession of the Flat relying on the Agreement. He further incurred decoration and furnishing costs in the sum of about HK$210,000 in 2011.

27.  On these allegations, Mr Lau claims that Mr Tsang is estopped from denying him the beneficial interest in the Flat by reason of a promissory estoppel. Mr Tsang now holds the same on trust for him.

28.  Mr Lau’s alternative case is that the Agreement gives rise to a common intention constructive trust or an express trust. He further prays in aid resulting trust on the basis of his payment of HK$600,000 to the developer and the subsequent decoration and furnishing expenses in the sum of HK$210,000.

29.  Another alternative case of Mr Lau is the plea of adverse possession. He alleges that since 1998, he and his family have had exclusive control, possession and occupation of the Flat and no one has ever asserted against him his right or title to use or occupy the Flat. He claims that he has the requisite intention to possess.

30.  Mr Lau claims that his and his family’s exclusive possession of the Flat since 1998 is adverse to Mr Tsang’s paper title and pursuant to section 17 of the Limitation Ordinance, Cap.347 (“the LO”), Mr Tsang’s title to the Flat has been extinguished.

31.  Mr Lau prays for a declaration that he is the beneficial owner of the Flat and a declaration that Mr Tsang holds the Flat on trust for and on behalf of him. Also, Mr Lau prays for an order that all the estate, right, title and interest in the Flat be vested in him and a declaration that he has acquired a possessory title to the Flat and that Mr Tsang’s title to the Flat has been extinguished by virtue of section 17 of the LO.

32.  Mr Tsang filed a Defence and Counterclaim, which was struck out as mentioned before.

South-China’s pleaded case

33.  South-China simply relies on the relevant provisions of the Loan Agreement and the Legal Charge and by reason of the defaults of Mr Tsang, it claims against Mr Tsang for payment of all monies due by Mr Tsang and his delivery of vacant possession of the Flat.

34.  As against Mr Lau, South-China claims against Mr Lau for a declaration that he is liable to deliver vacant possession of the Flat to South-China and his actual delivery of the same.

35.  Mr Tsang has not responded to the Legal Charge Action. He is absent at trial.

Issues

36.  I believe that the key issues are:

(1)  Whether the Agreement existed and if so,  whether Mr Lau performed his payment obligation?

(2)  Whether there was a common intention between   Mr Lau and Mr Tsang that Mr Lau would have  beneficial interest in the Flat?

(3)  Whether Mr Lau has adversely occupied the Flat   to the exclusion of Mr Tsang without his consent?

(4)  If Mr Lau has any beneficial interest in the Flat   or a possessory title to the same, is it binding on   or does it enjoy priority over South-China’s   interest?

37.  I shall determine these issues in turn.

38.  Mr Lau has the burden to prove the existence of the Agreement with credible evidence.

39.  First, I note that there is not a shred of documentary evidence to support the existence of the Agreement or the alleged background facts leading to its formation. Mr Lau relies on his own oral evidence. He did not strike me as a credible and reliable witness, however.

40.  Mr Lau disclosed for the first time his personal background under cross-examination. He completed his primary education. Since 1997 or 1998, Mr Lau has been a full time property intermediary dealing with small houses and agricultural lands in the New Territories. He himself was once a co-owner of a piece of agricultural land of over 60,000 square feet and another piece of land in Pak Tam Chung covering over 0.07 acres. He was also a ding (male indigenous villager) and had sold his small house to a developer.

41.  Given Mr Lau’s vast experience in handling property transactions, he must appreciate the necessity to have any agreement relating to interests in land to be in writing. He should ensure that he had a written copy of the agreement with the developer relating to the return of the Dings rights in the first place. He should need this to convince the Tsang brothers that the developer offered to give back their Ding rights upon payment of the two sums of HK$240,000 and HK$600,000. Lastly, there is no reason why he did not ask for the Agreement to be reduced into writing and signed by the parties to protect his position.

42.  Mr Lau alleges that Mr Tsang promised him that the Flat after completion would belong to him. He did not say anything how exactly the beneficial interest in the Flat was to be transferred to him. Being a property agent himself, he should know very well how interests in properties can be transferred.

43.  It is incredible that Mr Lau had not made any demand to Mr Tsang for the transfer of his beneficial interest in the Flat for more than a decade. It was only in the wake of the Lands Tribunal Claim made against him by Mr Tsang in 2013 that he took steps to claim his alleged beneficial interest.

44.  When asked about his inaction to enforce the Agreement under cross-examination, Mr Lau first asserted that he did not know whether the Certificate of Compliance had been issued yet. It was a lame excuse. Given his experience, it must be clear to him a Certificate of Compliance should be issued soon after the completion of construction of a small house and it is a prerequisite for an assignment of a small house or any part thereof. It is improbable that a Certificate of Compliance can be outstanding for years. In any event, a simple land search will give him an answer.  

45.  Then, Mr Lau said for the first time that he had asked Mr Tsang a few times for the transfer about 7 to 8 years after he had occupied the Flat but Mr Tsang was always evasive.

46.  If that had been the case, Mr Lau should have stepped up his action to secure the performance of Mr Tsang’s obligation under the Agreement after the inordinate delay. Instead, he did nothing for a few more years. I cannot accept his belated allegation.

47.  Even when Mr Tsang asked him to sign the Tenancy Agreement in 2011, Mr Lau did not ask Mr Tsang to transfer the legal title to him pursuant to the Agreement or promise. He explained that he did not think too much about it. I believe a more plausible explanation is that there was no such agreement or promise at all.

48.  It is noteworthy that a grantee requires the consent of the Government for any assignment of any interest or part with possession of a small house. A land premium being the difference between the amount of premium paid by the grantee and the full market value of the lot as at the date of the application for consent is payable to the Government. Such land premium can be substantial.

49.  Mr Lau, having vast experience in dealing with small house transactions and being a male indigenous villager having Ding rights himself, must be aware of this requirement. The land premium payable when he was to be assigned the beneficial interest in the Flat could far exceed HK$600,000. This matter must have been discussed between Mr Tsang and him and there must be an express provision as to which party was to pay the land premium when it became payable.

50.  The pleaded case of the Agreement and his witness statement said nothing about this important matter. This was a glaring omission in my view. In cross-examination, Mr Lau said that they had agreed that Mr Tsang agreed to pay the land premium.

51.  There is no explanation given for the Tsang brothers’ reluctance to pay an extra sum of HK$600,000 to the developer to buy back their Ding rights for their respective lots. It is unreasonable that instead of paying the developer an additional sum of HK$300,000 for the Lot himself, Mr Tsang agreed to bear all the construction cost of the Small House and pay the land premium for gifting the Flat to Mr Lau merely on the condition that he paid the said sum to the developer.

52.  It begs the question of why Mr Tsang refused to pay the sum of HK$300,000 himself in the first place. It does not appear that it was due to his financial difficulties. He managed to pay the construction costs of the Small House and was prepared to pay the land premium.

53.  I am unable to accept that, on balance of probabilities, the Agreement existed. Nor can I accept that Mr Tsang made any promise concerning the legal title and beneficial interest in the Flat with Mr Lau.

54.  On the other hand, I cannot accept that Mr Lau paid the developer out of his pocket a sum of HK$600,000 or any sum at all. He stated that he had to borrow from his relatives including one Mr Wong Sui Yung (黃瑞容) and his friends to raise this sum. There is no documentary evidence of these loans. Mr Lau alleges that the developer upon receipt of the two sums returned to him the receipt issued by the Tsang brothers and a power of attorney. The receipt is not available now. There is no reason why he did not ask the developer to issue to him a receipt of his payment of HK$600,000. I cannot accept that the Tsang brothers would readily believe Mr Lau.

55.  Mr Lau alleges that when he made the payment to the developer, Mr Wong, one of his lenders, was also present as a witness. He called neither Mr Cheung, the representative of the developer, nor Mr Wong as his witness in these proceedings. He explained that Mr Wong often travelled and he did not want to trouble him. This explanation is unacceptable given the obvious importance and materiality of their evidence. I refuse to accept Mr Lau’s bare assertion of his payment of the sum of HK$600,000.

56.  I have considerable misgivings about the version of events of Mr Lau. The Small House Policy implemented by the Government since 1972 entitles New Territories male indigenous villagers to Ding rights. These rights are the subject matter of many litigations and were succinctly explained by Poon CJHC in Kwok Cheuk Kin v Director of Lands [2021] 1 HKLRD 737 from §§3-11.

57.  Ding rights are for the benefit of New Territories male indigenous villagers and they are not legally assignable. Any sale transactions of Ding rights would invariably lead to misrepresentations and deception to be made to the Government in the course of applications to exercise such rights. These assignments are illegal and unenforceable: see Best Sheen Development Ltd v Official Receiver [2001] 1 HKLRD 866, Tang Teng and Ors. v Cheung Tin Wah and Anor. [2014] 2 HKLRD 1032, Chan Yau v Chan Calvin and Anor. [2014] 5 HKLRD 304.

58.  It may also attract criminal liability: HKSAR v Li Yam Pui David(unreported, CACC 425/2015, 29.4.2016).

59.  Hence, the developer could not have purchased the Ding rights from the Tsang brothers in the first place and the Tsang brothers could not have bought back their Ding rights. The Ding rights remained with the Tsang brothers throughout. The purported sale of the Ding rights could never be legal and enforceable. Mr Lau knowingly took part in such a transaction and even purportedly agreed to pay an extra sum of HK$600,000 to the developer on behalf of the Tsang brothers. This sum cannot be regarded as the purchase money of the Small House or any part of it in my judgment.  

60.  Therefore, even if Mr Lau had made the payment of HK$600,000, I cannot accept that it was a contribution to the purchase price of the Flat.

61.  Further, there is no credible evidence to support the alleged intention or promise of Mr Tsang that Mr Lau should have any beneficial interest in the Flat.

62.  Given these factual findings, the pleaded case of Mr Lau based on promissory estoppel, common intention constructive trust and resulting trust must be rejected.

63.  Now I turn to his alternative case of adverse possession. The starting point is that the burden is on Mr Lau to prove with compelling evidence the twin requirements: both factual possession and the requisite intention to possess, i.e., animus possidendi for the requisite period under the LO: Wong Tak Yue v Kung Kwok Wai & Anor. (No.2) (1997-98) 1 HKCFAR 55 at p.68E per Li CJ.   

64.  If a person takes possession by virtue of a licence granted by another, it is the licensor who is treated as being in possession: see To Chun Keung v Kung Kwok Wai David [1997] 1 WLR 1232, per Lord Hoffmann at 1235 D-F.

65.  For this plea, Mr Lau relies on his own evidence. Mr Tsang and South-China have adduced no contrary evidence.

66.  His pleaded case is that he started his adverse possession of the Flat in or about 1998. His evidence is that he and his family moved into the Flat on 26 December 1998.   

67.  I believe that the CLP Letter provides a more reliable answer to the actual time when the Flat was first occupied. It should be March 1999. I also accept that the attendance of Mr Lau at the Meeting shows that he already resided at the Flat in September 2000. I am aware that the Certificate of Compliance was only issued in 2003 but it did not negate the fact that the Flat could be habitable in 1999 with the electricity supply in place.

68.  If Mr Lau could prove the two requirements of adverse possession, the title of Mr Tsang to the Flat had already been extinguished when Mr Lau issued the Writ in the Ownership Action in July 2013.

69.  The fact that Mr Lau and his family had resided at the Flat for more than 12 years before the Ownership Action was commenced is not in serious dispute. The issue is whether the occupation was adverse to the right of Mr Tsang and without his consent.

70.  There is no direct evidence emanating from Mr Tsang as to whether he consented to Mr Lau’s occupation of the Flat in the very beginning. His Defence has been struck out and I can attach little weight on his testimony in the trial of the Lands Tribunal Claim.

71.  I have rejected Mr Lau’s evidence of the Agreement and his alleged payment of HK$600,000. I find him to be an untruthful witness. I should assess his self-serving evidence or statements with caution.

72.  First of all, Mr Lau in his witness statement stated that Mr Tsang and his family did not raise any objection to his moving into the Flat on 26 December 1998 by their conduct. Throughout his oral testimony, he did not say that he occupied the Flat without the consent of Mr Tsang.

73.  Indeed, under cross-examination, Mr Lau agreed that Mr Tsang had allowed him to reside at the Flat before the transfer of the legal ownership of the Flat to him. Of course I have rejected his allegation of the Allegation and the promise but the fact remains he started residing at the Flat with his family with the consent of Mr Tsang. I cannot accept that the requisite period under section 17 of the LO could start to run from the outset of Mr Lau’s occupation if it is applicable at all.

74.  I am alive to the fact that there is no suggestion that Mr Lau had paid Mr Tsang any rent for his occupation of the Flat throughout. But this alone does not negate the existence of a licence or Mr Tsang’s consent to Mr Lau’s use of the Flat.

75.  Mr Lau should be able to tell with full frankness the circumstances under which he started occupying the Flat. He chose to rely on the Agreement and the promise, which I found to be non-existent. He can hardly discharge his burden of proof.

76.  The most telling piece of evidence is the Tenancy Agreement. In his Reply, Mr Lau admits that on or about 1 June 2011 upon the request and the misrepresentation of Mr Tsang at a restaurant in Sai Kung in the presence of various witnesses signed the Tenancy Agreement in respect of the Flat so as to enable Mr Tsang to apply for a mortgage from an unidentified bank in respect of the Small House.

77.  It is unfortunate that neither the Tenancy Agreement nor the said mortgage is disclosed.

78.  By the Decision, it was adjudicated that the Tenancy Agreement was not intended by Mr Lau and Mr Tsang to be a legally binding agreement and it was created for the purpose of Mr Tsang’s loan application to a bank only. The deputy judge made it clear that it was not necessary for her to determine how and when Mr Lau entered and occupied the Flat and she merely focused on the nature and the legal effect of the Tenancy Agreement.

79.  Whilst the Tenancy Agreement does not evidence the lease purportedly contained therein, it does shed light on the relationship between Mr Lau and Mr Tsang in respect of the Flat. The fact that Mr Lau was willing to create the Tenancy Agreement albeit he did not sign on it to assist Mr Tsang is remarkable.

80.  Mr Lau must be aware that Mr Tsang was exercising his property right relating to the Small House including the Flat when he applied for a mortgage loan. He must know from his experience in property dealing that if Mr Tsang had defaulted on mortgage repayment to the bank, the bank would be entitled to possession of the Small House and Mr Lau might be required to vacate the Flat. Despite such an obvious risk, which he could do nothing about, Mr Lau did not just fail to raise objection to Mr Tsang’s mortgage application. Mr Lau actually rendered his assistance and agreed to the Tenancy Agreement. In doing so, Mr Lau accepted Mr Tsang’s legal title to the Flat.  

81.  Mr Cheung, together with Mr Ng, for South-China, seeks to rely on sections 23 and 24 of the LO and submits that Mr Lau acknowledged the title of Mr Tsang to the Flat in writing by way of the Tenancy Agreement. He submits that the finding of the deputy judge in the Decision that there was no tenancy created by the Tenancy Agreement does not alter the fact that it was a written acknowledgement of Mr Tsang’s title under sections 23 and 24 of the LO. Therefore, time to run under section 17 of the LO should start afresh from the date of the Tenancy Agreement.

82.  I find no merit in this submission. First, the deputy judge preferred the evidence of Mr Lau and accepted that the English signature appearing in the Tenancy Agreement did not belong to him. The requirement of a signature by the person in possession of the land under section 24 of the LO is not fulfilled anyway.

83.  More importantly, the deputy judge actually found that the Tenancy Agreement was a bogus document without any binding effect. As such, it should not be permissible to cherry pick a part of the document including any reference to the title of Mr Tsang to the Flat and insist on its validity.

84.  On the other hand, Mr Chan, together with Mr Pang, for Mr Lau, argues that sections 23 and 24 of the LO have no application here because the title of Mr Tsang would have been extinguished by the time when the Tenancy Agreement was made in 2011.

85.  I am not convinced by this submission. It begs the question of when time to run started. In any event, I refuse to treat any part of the Tenancy Agreement as an acknowledgement of title for the purpose of sections 23 and 24 of the LO.

86.  To sum up, I believe that, on balance of probabilities, up to the Lands Tribunal Claim was made in 2013, Mr Tsang had given a bare licence to Mr Lau for his occupation of the Flat. Mr Lau’s plea of adverse possession is not borne out by evidence.

Priority

87.  Having made the factual findings that Mr Lau does not have any beneficial interest in the Flat or any possessory title to the Flat by virtue of his alleged adverse possession, the priority issue does not arise at all.

O.14A Summons

88.  By the O.14A Summons, South-China asks this court to determine a question of law as to whether it has priority over the interests of Mr Lau in the Flat under the Land Registration Ordinance, Cap.128 (“the LRO”) in any event by virtue of its registration of the Legal Charge on 2 July 2015 and the Writ of the Legal Charge Action on 11 January 2016. On 6 August 2013, Mr Lau caused to register the Writ in the Ownership Action. He caused it to be de-registered in March 2014 and he 

re-registered the same only on 5 June 2017.

89.  Mr Cheung urges this court to determine the O.14A Summons regardless of the alleged interests of Mr Lau in both actions. He submits that the question can be resolved even on the basis that Mr Lau succeeds in his claim for a possessory title by way of adverse possession.

90.  I am not impressed with this late application.

91.  To determine the question on the assumption that Mr Lau had acquired a possessory title before the Legal Charge was registered is not desirable in my view.  The issues between South-China and Mr Lau do not merely concern priority under the LRO as submitted by Mr Cheung. The effect of the possessory title of Mr Lau on the enforcement of the Legal Charge even without any prior registration of a lis pendens against the Flat has to be examined too.

92.  In the premises, I am not convinced that the determination of the question will finally determine the rival claims or any cause or matters between South-China and Mr Lau. The question is not suitable for determination by way of an O.14A application. 

93.  Even if it were, I would refuse to exercise my discretion to determine the question immediately before the trial as a matter of case management.

94.  I, therefore, could only allow the first paragraph of the O.14A Summons granting leave to South-China to amend the Amended Reply with costs be in the cause at the hearing on 22 March 2021.

Conclusion and order

95.  For the reasons given, I conclude that the pleas of promissory estoppel, common intention constructive trust and resulting trust are not borne out by evidence. Nor is the claim of adverse possession. The claim of Mr Lau in the Ownership Action must be dismissed in its entirety.

96.  Having concluded that Mr Lau does not have any beneficial interest in the Flat or a possessory title thereto, South-China is entitled to judgment to be entered against Mr Lau in the Legal Charge Action. Mr Lau should deliver vacant possession to South-China within 90 days from the date of this Judgment.

97.  I dismiss the O.14A Summons (except paragraph 1 thereof) with costs to Mr Lau, to be taxed if not agreed with certificate for one counsel. I should note that the O.14A Summons was not separately argued at trial.

98.  For the costs in the Ownership Action, given the fact that the pleadings of Mr Tsang were struck out long time ago and his non-involvement thereafter, I order that each party bears his own costs including any costs reserved.

99.  For the costs in the Legal Charge Action, South-China should have its costs including all costs reserved to be borne by Mr Tsang and Mr Lau until the default judgment was entered against the former on 28 June 2016; thereafter by the latter solely, to be taxed if not agreed. I would also grant a certificate for one counsel. These are orders nisi.

100.  Mr Cheung, Mr Ng, Mr Chan and Mr Pang have obviously put in an enormous amount of efforts in this matter and have rendered considerable assistance to this court. I thank all of them for their able and submissions.